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January 2011 Special Session
2011 - 2012 LEGISLATURE
January 11, 2011 - Introduced by Committee on Assembly Organization, by
request of Governor Scott Walker, Representative Vos, and Senator Moulton.
Referred to Committee on Jobs, Economy and Small Business.
AB7,1,4 1An Act to amend 71.05 (6) (a) 15., 71.21 (4), 71.26 (2) (a) 4., 71.34 (1k) (g), 71.45
2(2) (a) 10. and 77.92 (4); and to create 71.07 (5p), 71.10 (4) (dw), 71.28 (5p),
371.30 (3) (dw), 71.47 (5p) and 71.49 (1) (dw) of the statutes; relating to: an
4income and franchise tax credit for small businesses.
Analysis by the Legislative Reference Bureau
This bill creates an income and franchise tax credit for small businesses. Under
the bill, a business that has less than $500,000 in gross receipts in the taxable year
may claim as a credit a percentage of the taxpayer's tax liability based on the amount
of the gross receipts that exceed $250,000. If the business has no more than $250,000
in gross receipts in the taxable year, the business may claim a credit equal to 15
percent of its tax liability. Under the bill, the taxpayer does not receive a refund, but
may apply any remaining credit amounts to subsequent taxable years.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB7, s. 1 5Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:
AB7,2,6
171.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de),
2(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r),
3(3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), and (8r) and
4not passed through by a partnership, limited liability company, or tax-option
5corporation that has added that amount to the partnership's, company's, or
6tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g).
AB7, s. 2 7Section 2. 71.07 (5p) of the statutes is created to read:
AB7,2,88 71.07 (5p) Small business credit. (a) Definitions. In this subsection:
AB7,2,99 1. "Claimant" means a person who files a claim under this subsection.
AB7,2,1410 2. "Gross receipts from all activities" means gross receipts, gross sales, gross
11dividends, gross interest income, gross rents, gross royalties, the gross sales price
12from the disposition of capital assets and business assets, gross receipts passed
13through from other entities, and all other receipts that are included in gross income
14before apportionment for Wisconsin franchise or income tax purposes.
AB7,2,1915 (b) Filing claims. Subject to the limitations provided in this subsection, for
16taxable years beginning after December 31, 2010, a claimant may claim as a credit
17against the tax imposed under s. 71.02, up to the amount of the tax, the following
18percentage of the claimant's gross tax liability in the taxable year for which the claim
19relates:
AB7,2,2120 1. If the gross receipts from all activities of the claimant's business in the
21taxable year is no more than $250,000, 15 percent.
AB7,2,2522 2. If the gross receipts from all activities of the claimant's business in the
23taxable year is greater than $250,000, but less than $500,000, a percentage equal to
2415, minus the product of 0.00006 multiplied by the amount of the gross receipts for
25the taxable year that exceed $250,000.
AB7,3,2
13. If the gross receipts from all activities of the claimant's business in the
2taxable year is $500,000 or more, 0 percent.
AB7,3,73 (c) Limitations. Partnerships, limited liability companies, and tax-option
4corporations may not claim the credit under this subsection. A partnership, limited
5liability company, or tax-option corporation shall compute the rate of credit that each
6of its partners, members, or shareholders may claim and shall provide that
7information to each of them.
AB7,3,118 (d) Administration. 1. A claimant shall claim the credit under this subsection
9on a form prepared by the department and shall submit to the department any
10documentation required by the department to administer the credit under this
11subsection.
AB7,3,1312 2. Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies
13to the credit under this subsection.
AB7, s. 3 14Section 3. 71.10 (4) (dw) of the statutes is created to read:
AB7,3,1515 71.10 (4) (dw) Small business credit under s. 71.07 (5p).
AB7, s. 4 16Section 4. 71.21 (4) of the statutes is amended to read:
AB7,3,2017 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
18(2dj), (2dL), (2dm), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s),
19(3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), and (8r) and passed
20through to partners shall be added to the partnership's income.
AB7, s. 5 21Section 5. 71.26 (2) (a) 4. of the statutes is amended to read:
AB7,4,222 71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dd),
23(1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy), (3g), (3h), (3n), (3p), (3q), (3r),
24(3rm), (3rn), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), and (8r) and
25not passed through by a partnership, limited liability company, or tax-option

1corporation that has added that amount to the partnership's, limited liability
2company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g).
AB7, s. 6 3Section 6. 71.28 (5p) of the statutes is created to read:
AB7,4,44 71.28 (5p) Small business credit. (a) Definitions. In this subsection:
AB7,4,55 1. "Claimant" means a person who files a claim under this subsection.
AB7,4,106 2. "Gross receipts from all activities" means gross receipts, gross sales, gross
7dividends, gross interest income, gross rents, gross royalties, the gross sales price
8from the disposition of capital assets and business assets, gross receipts passed
9through from other entities, and all other receipts that are included in gross income
10before apportionment for Wisconsin franchise or income tax purposes.
AB7,4,1511 (b) Filing claims. Subject to the limitations provided in this subsection, for
12taxable years beginning after December 31, 2010, a claimant may claim as a credit
13against the tax imposed under s. 71.23, up to the amount of the tax, the following
14percentage of the claimant's gross tax liability in the taxable year for which the claim
15relates:
AB7,4,1716 1. If the gross receipts from all activities of the claimant's business in the
17taxable year is no more than $250,000, 15 percent.
AB7,4,2118 2. If the gross receipts from all activities of the claimant's business in the
19taxable year is greater than $250,000, but less than $500,000, a percentage equal to
2015, minus the product of 0.00006 multiplied by the amount of the gross receipts for
21the taxable year that exceed $250,000.
AB7,4,2322 3. If the gross receipts from all activities of the claimant's business in the
23taxable year is $500,000 or more, 0 percent.
AB7,5,324 (c) Limitations. Partnerships, limited liability companies, and tax-option
25corporations may not claim the credit under this subsection. A partnership, limited

1liability company, or tax-option corporation shall compute the rate of credit that each
2of its partners, members, or shareholders may claim and shall provide that
3information to each of them.
AB7,5,74 (d) Administration. 1. A claimant shall claim the credit under this subsection
5on a form prepared by the department and shall submit to the department any
6documentation required by the department to administer the credit under this
7subsection.
AB7,5,98 2. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to
9the credit under this subsection.
AB7, s. 7 10Section 7. 71.30 (3) (dw) of the statutes is created to read:
AB7,5,1111 71.30 (3) (dw) Small business credit under s. 71.28 (5p).
AB7, s. 8 12Section 8. 71.34 (1k) (g) of the statutes is amended to read:
AB7,5,1613 71.34 (1k) (g) An addition shall be made for credits computed by a tax-option
14corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy),
15(3), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j),
16(5k), (5p), (5r), (5rm), and (8r) and passed through to shareholders.
AB7, s. 9 17Section 9. 71.45 (2) (a) 10. of the statutes is amended to read:
AB7,5,2418 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit
19computed under s. 71.47 (1dd) to (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn),
20(3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), and (8r) and not passed
21through by a partnership, limited liability company, or tax-option corporation that
22has added that amount to the partnership's, limited liability company's, or
23tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g) and the amount
24of credit computed under s. 71.47 (1), (3), (3t), (4), (4m), and (5).
AB7, s. 10 25Section 10. 71.47 (5p) of the statutes is created to read:
AB7,6,1
171.47 (5p) Small business credit. (a) Definitions. In this subsection:
AB7,6,22 1. "Claimant" means a person who files a claim under this subsection.
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